Coffee Day will take 'required action' to get attached Mindtree shares released by I-T dept

The I-T department has attached a portion of shares held by Siddhartha and Coffee Day Enterprises Ltd in IT firm Mindtree over a potential tax demand.

PTI

January 28, 2019, 06:38 IST

Coffee Day Enterprises has said it would take required action in the next few days to get a portion of IT firm Mindtree shares -- owned by the company and its promoter V G Siddhartha -- released by the Income Tax Department.

The I-T department has attached a portion of shares held by Siddhartha and Coffee Day Enterprises Ltd in IT firm Mindtree over a potential tax demand.

Further, Coffee Day Enterprises -- which operates popular coffee chain CCD -- said it has already discharged its tax liability along with the revised returns.

"… there is no tax liability payable by the company and its subsidiaries as per the revised returns filed. The promoter has discharged all the tax liability along with the revised returns. Further, there is no undisputed tax liability for the promoter and the company," Coffee Day Enterprises informed in a regulatory filing Saturday.

It also said that the "required action will be taken to release these shares in the next few days".

According to the company, 74.90 lakh shares of Mindtree have been affected by the provisional attachment by the Income Tax Department, in which 22.20 lakh shares are held by Coffee Day Enterprises in Mindtree and 52.70 lakh shares by its promoter Siddhartha.

Coffee Day Enterprises and its promoter V G Siddhartha have "received orders u/s. 281B of Income Tax Act, 1961 provisionally attaching few shares held in Mindtree to safeguard the interest of the Revenue in respect of possible future tax and penalty obligations in respect of open assessments", it said.

"The company would like to clarify that in response to notices u/s 148 & 153A of the income tax, the promoter and the company have filed required revised returns," said Coffee Day Enterprises in a clarification filed to bourses.

Siddhartha, who owns about 21 per cent stake in Mindtree, is said to be in advanced discussions with various entities to sell his shares in the IT company.

On Saturday, Mindtree had also informed the stock exchanges that the I-T department has attached a portion of shares held by Siddhartha and Coffee Day Enterprises Ltd in IT firm Mindtree.

It added that the attachment also "prohibited for transfer or charge" of 22.2 lakh equity shares of Coffee Day Enterprises Ltd, and 52.7 lakh shares held by Siddhartha.

The order would be applicable for six months from the date of the order i.e. January 25, 2019, it said.

At the end of December 2018 quarter, Siddhartha held 54.69 lakh shares (3.3 per cent stake) in Mindtree, while Coffee Day Enterprises Ltd had more than 1.74 crore shares (10.63 per cent stake). Another entity, Coffee Day Trading Ltd holds over 1.05 crore shares (6.45 per cent holding).

Mindtree's promoters, which include Subroto Bagchi, Krishnakumar Natarajan, NS Parthasarathy, and Rostow Ravanan, together hold roughly 13 per cent stake in the company.

A recent Allahabad high court judgment may, however, provide some relief with the court ruling that there shall be no tax levied in case of purchases made at duty free stores at the arrival or departure terminals.